Tobacco Farmers and Conversion

Having grown up on small tobacco farms I'm keenly aware that tobacco farmers can be a hard-headed lot. Heaven knows they take a back seat to no one when it comes to hard work. I haven't cropped tobacco in over twenty years and I'm still resting. Everything I've done since has been easy.

Talking to tobacco farmers I know it seems clear that proposals floated at the national level to include a buyout offer for tobacco allotment holders in any cigarette company lawsuit settlement should be greeted with unambiguous enthusiasm by anyone purporting to represent the views of small tobacco farmers. Yet, Jesse Helms, Lauch Faircloth, and Richard Morgan all attacked the trial balloon sent up late last year by Senator Richard Lugar (R-IN). They vowed to oppose any settlement that ended price supports for tobacco.

If you recall, this proposal would have offered allotment holders $8 per lb., or about $17,000 per acre on average in return for ending the price support system which guarantees tobacco farmers a minimum price for their product. If such a deal really emerges, tobacco farmers should seize it and count their blessings. If the "average" allotment size is around thirteen acres, as is widely reported, then the reimbursement for that average allotment holder would come pretty close to a cool quarter of a million dollars, just to get out of the tobacco program; and — get this — you keep your land!

Some tobacco farmers have been heard to complain about the loss of value in their investment in specialized equipment that is suited only to tobacco farming. Here's a tip for any farmers out there contemplating the brochures and sales pitches for new bulk barns and harvesters — put the checkbook down! If you haven't been keeping up, investing in tobacco farming the way it's done today — counting on price supports as far as the eye can see — is doomed. Talk to an accountant and depreciate the hell out of those bulk barns and harvesters while you can, because those harvesters are soon gonna be our local equivalent of the Midwestern combines of ten years ago — very expensive entrants in demolition derbies.

It's not the government's fault. It's not EPA or FDA, or regulations or even Bill Clinton. It's the global economy and the opportunism of the tobacco companies. They were never the farmers' friends, and they've proved it once and for all by cultivating suppliers overseas to compete with American tobacco farmers. You could have a Joe Camel mascot driving every school bus and a cigarette machine in every school cafeteria, and in the long run globalization of tobacco markets would still drive North Carolina farmers under.

The simple fact is, tobacco use is declining in this country, and overseas production of cheap tobacco is increasing, as the globalization of the economy reduces the competitive advantage of American growers. The tobacco companies are only going to buy what they need from American growers, and that amount is going to go nowhere but down as they develop new sources for leaf in Zimbabwe, Brazil, and elsewhere.

Here in North Carolina pundits, politicians, and spokesmen for tobacco farmers have recently been wailing at this year's reduction in the tobacco quota, down 17% from last year. What they fail to mention is that the 1997 quota was based on unusually high demand from the tobacco companies due to the shortfall of production in 1996, the year that Hurricanes Bertha and Fran damaged much of the North Carolina crop. Thus, 1997 was an unusual bonanza year of high demand, not a benchmark that could have in any way been sustained. To cry foul at the quota reduction as if it were some conspiratorial plot is a bit disingenuous.

So where should North Carolina's tobacco farmers turn? First they must each for themselves ask the question: which is more important, staying in tobacco farming as it has been, or staying in farming? Those tobacco farmers who, misled by politicians and agribusiness, opt for the former will likely oversee the demise of their farms and the loss of their land. This is the direction that the wheels of history are grinding, and no policy or program is going to change it.

For those small farmers who wish to stay in farming and are willing to innovate, the news is more encouraging. The way to maximize profit per acre on small farming enterprises is not with reliance on heavy equipment and expensive chemicals and other trappings of industrial farming methods. The key is to undertake innovative marketing strategies, including doing a bit of research on what the market is in a given radius around your farm, say a one-hour drive. Study the local needs and provide a diverse set of offerings to meet those needs and to spread risks. That is what farmers did once upon a time.

Surveys of tobacco farmers show that most are interested in some form of diversification. Those that are interested should endeavor to learn more and start experimenting on alternative crops, easing them into their production cycle. One Caswell County tobacco farmer was featured in the Farm Bureau magazine a while back for growing winter strawberries in his tobacco plant greenhouse. He realized he had a very large asset sitting on his land that was idle ten months out of the year, and found a profitable way to put it to use.

Other farmers may want to try marketing specialty fruits and vegetables to buyers in nearby towns and cities. Restaurants, specialty markets, and direct marketing to consumers are possible avenues for getting farm products to buyers. Subscription produce marketing and pick-your-own are growing in popularity as consumers are increasingly aware of food safety issues and health factors in industrially produced food. By cutting or eliminating distribution costs and getting retail prices for their produce, some farmers can begin to make up for the loss of their protected tobacco market.

Is such a strategy a gamble for these farmers? Of course, and some will lose. But what are the options? Industrial hog and poultry operations have quickly run up against the limit of environmental carrying capacity, and have a host of other problems as well. A farmer could simply take his allotment buyout money if it came to pass, and build a duplex or two in town, or maybe a car wash or laundromat to manage. It would be an easy living compared to tobacco farming and far more predictable.

But if it is really the love of the land, husbandry, and nature that keeps a person in the farming game, then an allotment buyout settlement could be a godsend that rarely happens in the history of agriculture. When else have a class of farmers, made obsolete by the fortunes of economy, had such a chance? In this era when virtually all working people stand on the brink of being made obsolete by the global economy, who else is given such a luxurious parachute?

Your typical small farmer with 13 acres or less of tobacco allotment could use the settlement money toward puttings an organic operation in a viable position. By investing in appropriate infrastucture for the new operation and keeping a little in reserve for an anticipated temporary income drop-off (a year or two), conversion from subsidy farming to something that more closely resembles old-fashioned husbandry becomes a realistic possibility.

Small farmers should consider the possibility that they are playing a losing game by trying to compete with big mega-farms using the same methods and equipment. Perhaps it is time to change the game, start playing by rules that maximize the advantage of the small operation. Hands-on husbandry has value too, and increasingly consumers are willing to pay for high-quality food raised with care.